SC Cancels Contract, Orders New Tender Process to Ensure Compliance; 4th Respondent to Operate Weighbridge Temporarily.

The SC allowed the appeal, setting aside the lower courts' orders and the contract awarded to the 4th respondent. It directed the State to initiate a fresh tender process, ensuring compliance with guidelines. The 4th respondent could operate the weighbridge until the new tender process concluded, with any excess payment refundable by the State.

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Issues Involved:
1. Maintainability of the appeal before the Appellate Bench of Gauhati High Court.
2. Finality of the contract value fixed by the High Court.
3. Application of the principle of predatory pricing to the contract.
4. Validity of the acceptance of the bid of the 4th respondent.
5. Directions for fresh tender process.

Summary:

1. Maintainability of the Appeal:
The appellant challenged the rejection of his bid and the acceptance of the 4th respondent's bid before the Appellate Bench of the Gauhati High Court. The Appellate Bench entertained the appeal, rejecting the objections raised by the 4th respondent and the State. The Supreme Court found no reason to interfere with this finding, stating that the appellant had the right to challenge the rejection of his bid if he had no prior knowledge of the acceptance or rejection.

2. Finality of the Contract Value:
The High Court in its order dated 15.3.2002 had directed the State to re-examine and reassess the value of the tender, taking into consideration the report submitted by the Enforcement Inspectors. The Supreme Court held that the High Court's assessment of the tender value at Rs. 40,29,600 was only a tentative expression of opinion and not a conclusive value. The Tender Acceptance Committee had the authority to re-assess the value, which it did by fixing it at Rs. 2 crores, considering additional data from the PWD.

3. Predatory Pricing Principle:
The learned Single Judge applied the principle of predatory pricing, which was discussed in the case of Union of India and Ors. vs. Hindustan Development Corporation and Ors. The Supreme Court found that this principle did not apply to the contract in question, as it was a lease of a weigh bridge with fixed fees for weighment of trucks. The Court stated that the Government should aim to fetch the best possible value for its largesse and that mere offer of a high bid does not make it predatory in this type of contract.

4. Validity of the Acceptance of the 4th Respondent's Bid:
The Supreme Court held that the rejection of higher bids, including that of the appellant, in favor of the 4th respondent's lower bid was unsustainable. The acceptance of the 4th respondent's bid was based on an erroneous interpretation of the High Court's earlier judgment, which did not prohibit the authorities from considering other material while re-assessing the value of the tender.

5. Directions for Fresh Tender Process:
The Supreme Court set aside the acceptance of the 4th respondent's bid and directed the respondent State to call for fresh tenders. The new contract should be granted based on the fresh bids received and in accordance with the guidelines. The 4th respondent was allowed to operate the weigh bridge until the new tender process was completed, with the fresh contract to be awarded by 1.7.2004. Any excess amount paid by the 4th respondent beyond this period would be refundable by the State Government.

Conclusion:
The appeal was allowed, and the impugned orders of the courts below, as well as the contract awarded to the 4th respondent, were set aside. The Supreme Court directed a fresh tender process to be conducted by the State Government.

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